Stability and growth pact, reform (reform of the stability and growth pact)

Many proposals for reforming the Stability and Growth Pact with the aim of averting budget deficits among members of the monetary union at an early stage have been raised in detail. In order to correct the two fundamental flaws of the Stability and Growth Pact, the recommendation of the German Council of Economic Experts for a reverse voting mode seems to be the best way forward. According to this, the European Commission would have the initial power of decision in the excessive deficit procedure. It also proposes any sanctions. The Council of Ministers should be able to reject these decisions only with a two-thirds majority. Such a reverse vote can have the effect that members acting against the SGP are actually penalized. – See adjustment pressure, deficit financing ban, deficit ratio, peer pressure, default, debt brake, Semester, European, Stability and Growth Pact, fundamental error. – Cf. ECB Monthly Bulletin of March 2010, pp. 109 ff. (wide-ranging, in-depth reflections on SGP reform; many overviews and [pp. 130 ff.] clearly formulated conclusions), Deutsche Bundesbank Monthly Bulletin of August 2013, pp. 71 ff. (new decisions on excessive deficit procedures), ECB Monthly Report of September 2013, p. 113 ff. (results of strengthening the Stability and Growth Pact; further improvements are needed), Deutsche Bundesbank Monthly Report of January 2014, p. 41 ff. (fundamental issues; status and developments in individual EMU countries).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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